• The President of UOKiK, Tomasz Chróstny, initiated two proceedings against Certo law office, which runs the "Debt relief" and "I'm paying my debts" programmes.
• The allegations concern the implementation of practices infringing collective consumer interests and prohibited contractual provisions.
• Consumer, before signing a contract with a debt relief entity, please find out what specific services will it provide and how much it will cost.

A law office, Certo Kancelaria Janowicz-Stradomska i Wspólnicy sp.k., under the "Debt relief" and "I am paying my debts" programmes, offers consumers services the purpose of which is to reduce their debts. The objective is to reach agreements with creditors. Under both programmes, consumers make payments towards the repayment of their debts into accounts that can only be used by the law office. The President of the Office of Competition and Consumer Protection is concerned about certain practices of the law office and the contractual clauses it applies. Therefore, Tomasz Chróstny, the President of the Office of Competition and Consumer Protection, initiated two proceedings - infringement of collective consumer interests and recognising the provisions of the model contract as prohibited.

- Clients of Certo may have been misled as to the scope of the obligations of the law office and might have fallen for the suggestion that the entity pays their instalments on regular basis using the money paid by the consumers, and that the concluded contract would protect the consumers against being pursued by creditors. Another allegation relates to the possibility of the loss of funds paid by consumers to repay their debts as the law office deducts various fees. It should be remembered that the clients of the law office are a group of particularly sensitive consumers, while the entity, instead of helping them get out of the debt spiral, may contribute to the deterioration of their financial situation - says Tomasz Chróstny, the President of UOKiK.

Allegations against Certo

The President of UOKiK has brought five charges against Certo concerning practices that may infringe the collective interests of consumers. The allegations are:

• the possibility of misleading clients that the money paid by them, in accordance with the agreed payment schedule, into a certain account of the law office will be used to, inter alia, pay their liabilities towards their lenders. Meanwhile, the money is collected to be transferred to the account of the creditors only after the conclusion of a settlement agreement. The consumers may not be aware that the law office, which assures them that it takes actions to reduce their debt, does not pay the current loan instalments on their behalf, even though they pay the money to the entity on a regular basis,
• the possibility of misleading clients that the contract concluded with Certo and the debt reduction measures taken by the entity provide protection for the clients against the assertion of claims by creditors, e.g., in court. Consumers, granting powers of attorney to the law office, e.g. to conduct negotiations with the creditors, may be led to believe that they also cover the above-mentioned issue,
• the possibility of losing money accumulated on the account that belongs to Certo. The funds - paid by consumers on a monthly basis - are to be used, after deduction of the fees by the law office, to pay their debts once settlement agreements are concluded, however, the entity does not guarantee the conclusion of the agreements. Moreover, Certo can use the money to cover any additional costs that are not specified in the contract. As a result, the consumers may lose some or even all of the money they pay in,
• charging "upfront fees" before consumers receive the terms and conditions of the contract in writing. Clients are not sure whether they will get the money back if they do not qualify for the programme, and what the terms and conditions of the contract are,
• determining fees by Certo at net rate, that is, without VAT. According to current regulations, consumers should receive clear information about the total price at the time of concluding a contract, including all components of the price and taxes.

With regards to the second proceeding, the allegations concern 14 contractual provisions regulating, among other things, the change of the payment amount, additional costs, the possibility of extending the contract or its termination by the law office. If the allegations are confirmed, the law office may face a penalty of up to 10%  of its annual turnover for each practice and clause.

Consumer advice

• Read the contract carefully - make sure that it clearly states what the entity commits to and whether it guarantees a reduction of your debt. Check the conditions and deadlines for the termination of the contract by both parties and methods of settling payments in such a situation. You can get free assistance from the consumer ombudsman while reviewing the terms and conditions of your contract.

• Pay attention to the fees - whether is it a one-time payment and in what amount, or a monthly subscription, and whether the entity additionally expects the so-called success fee. Calculate the total amount of all costs related to the assistance in reducing your debt and make sure whether it is not cheaper to continue with the current repayment formula.
• Remember that you are still bound by a loan agreement and signing a contract with a debt settlement entity will not cease its execution. Find out if and how the entity guarantees the fulfilment of your current obligations related to your debt, and if so - check whether the entity actually does it.

More at: https://uokik.gov.pl/news.php?news_id=17447

Consumer assistance:

Phone 801 440 220 or 22 290 89 16 – consumer hotline
Email: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
Consumer Ombudsmen – in your town or county
Financial Ombudsman – if the complaint is rejected by the financial institution

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL